Report Claims Redbox Instant Could Close Up Shop This Year

Barely a year after its beta launch, the streaming video arm of Redbox could buckle this year under increasing pressure from Netflix and what one industry insider calls a "lack of profitability."

Benzinga is reporting that Redbox Instant owners Verizon and Outerwall could be looking for the exit door later this year as the DVD kiosk plus streaming video experiment falters against the competition.

According to GroupFlix.tv Founder and CEO James Norman, "Redbox doesn't have the infrastructure that Netflix does," which has resulted in ongoing issues with buffering while streaming content from Redbox Instant apps.

Norman came to the conclusion Redbox Instant was marked for death after compiling a survey of 500 television viewers for a report on the set-top box industry, and found that the company's product mix has yet to catch on with consumers.

"Similar to Blockbuster's failed streaming efforts years back, Redbox Instant encountered a cold reception in 2013 and will likely be shut down in 2014 for its lack of profitability," Norman elaborated.

Although the popular Redbox DVD kiosk rental service wouldn't be affected should the owners of Redbox Instant choose to heed Norman's advice, investors already called for the service to be sold, spun off or shut down entirely back in October, suggesting the company may be under renewed pressure to perform, even from within.